ETF Database » XRO

ETFs & Sector Rotation: Large Cap, Small Cap, Or International?

Michael Johnston — Mon, 06 Jun 2011 14:00:34 +0000

Sector rotation techniques have been around for decades, a relatively simple strategy often used by investors seeking to capitalize on short-term mispricings in order to generate alpha. In its most basic form, sector rotation involves segmenting the equity universe by industry, and moving into and out of various sectors depending on relative attractiveness from a valuation perspective. The idea is to overweight the sectors that are attractively priced, and underweight those that are deemed to be overvalued. Those who are able to identify overbought and oversold sectors–or even broader trends that may favor high beta or low beta stocks–can beat the market by regularly shifting exposure [see also Nine Twists On Sector ETF Investing]. More recently, ETFs have become popular tools for investors implementing sector rotation strategies; instead of requiring investors to identify individual stocks with promising outlooks, a high level approach can be employed to achieve broad exposure to [...]

Click here to read the original article on ETFdb.com.

Under The Microscope: Sector Rotation ETF (XRO)

Eric Dutram — Fri, 09 Apr 2010 21:14:35 +0000

During the Great Recovery of the last 12 months, every sector of the U.S. and global economies have gained ground. But some industries have performed better than others, resulting in big performance gaps between various sector-specific ETFs. According to ETF Guide, the Vanguard Total Stock Market ETF (VTI) rose 28.8% but the technology sector SPDR (XLK) jumped 51.0% and the materials sector SPDR (XLB) soared by 48.5%. This shows that while picking the right asset class is crucial, picking the correct sector can have just as big an impact on total returns. For investors seeking help in choosing sectors that could outperform the general market, Claymore/Zachs Sector Rotation ETF (XRO) offers an interesting choice. Underlying Index XRO tracks the Zacks Sector Rotation Index, which consists of equities that investment research firm Zacks believes offer a superior risk/return profile and could outperform the general market. The investable universe available to the [...]

Click here to read the original article on ETFdb.com.

Beyond SPY: Five Outperforming Large Cap ETFs

Michael Johnston — Thu, 10 Dec 2009 16:08:19 +0000

At the core of many investor portfolios is an allocation to large cap, U.S.-listed equities. With market capitalizations usually exceeding $10 billion, large cap stocks generally have long operating histories, stable operations, and large amounts of cash on hand, making them less risky investments than small and mid cap firms. Moreover, although domestic large caps are headquartered in the U.S., they are often multinational companies that generate significant portions of revenue and earnings from overseas, providing some degree of geographic diversification with the efficiency and liquidity that comes with U.S. exchanges. One of the most widely-followed benchmarks in the world is the S&P 500, a collection of the 500 largest publicly-traded U.S. companies (with a few exceptions). And one of the most popular ways to gain exposure to the companies included in this index is the SPDR S&P 500 ETF (SPY). SPY is one of the largest and most heavily-traded [...]

Click here to read the original article on ETFdb.com.

Special Report: Alpha ETFs Come Of Age

Michael Johnston — Tue, 01 Sep 2009 09:00:55 +0000

In the summer of 1992, Eugene Fama and Kenneth French published “The Cross-Section of Expected Stock Returns” in The Journal of Finance, a groundbreaking analysis that prompted financial presses to run headlines declaring “beta is dead.” While the death sentence may have been a bit severe, it struck a significant blow to a widely-accepted and longstanding financial concept, causing academics and investors to reconsider tenets they once took for granted. In recent decades, a collection of academic studies, disillusioned investors, and financial innovations have contributed to a similar prognosis for beta’s Greek neighbor, alpha. The idea that was hatched by Brinson and Hood and supported by the likes of Ibbotson and Kaplan and Barras and Scaillet was fueled by years of investor frustration. Following the introduction and rapid rise in the popularity of indexing and ETFs, it seemed that what started out as a scholarly whisper had grown into a [...]

Click here to read the original article on ETFdb.com.

ETF Database » XRO

ETFs & Sector Rotation: Large Cap, Small Cap, Or International?

Related Posts:

Under The Microscope: Sector Rotation ETF (XRO)

Related Posts:

Beyond SPY: Five Outperforming Large Cap ETFs

Related Posts:

Special Report: Alpha ETFs Come Of Age

Related Posts: